A transgene inserted in the telomere between the subterminal telomere associated sequence (TAS) and the terminal retrotransposon array, or within TAS, is repressed and variegates. This variegation, termed telomeric position effect (TPE), appears to be due to an interaction of repression induced by TAS and activation initiated by transcription of the retrotransposons. A telomeric transgene thus provides an assay for this interaction. These transgenes provide a means to investigate the control of HeT-A transcription and transposition, and thus telomere elongation. At least some of the transcription through these transgenes initiates in the upstream retrotransposon in the terminal array. Previous studies have identified genetic conditions in which TPE occurs and conditions in which it is suppressed. The purpose of this project is to identify changes in chromatin structure associated active and suppressed The chromatin proteins HP1 and HOAP are major components of telomere cap in Drosophila and are required for telomere stability. Besides the chromosome cap, HP1 is also localized along the HTT array and in TAS. Mutants for Su(var)205, the gene encoding HP1, have decreased HP1 level in the HTT array and increased transcription of individual HeT-A elements. This suggests that HP1 levels directly affect HeT-A activity along the HTT array, although they have little or no effect on transcription of a white reporter gene in the HTT. Chromatin immunoprecipitation to identify other heterochromatic proteins indicates that TAS and the HTT array may be distinct from either heterochromatin or euchromatin.